Purchasing cost reduction planning and checking

ABSTRACT

A method for purchasing cost reduction planning and checking includes receiving from a user one or more part characteristics and one or more supplier characteristics. The method determines one or more templates based on the part characteristics and the supplier characteristics received. Each template corresponds to a cost reduction plan. In response to the user selecting a desired template, the method receives from the user values for one or more parameters of the desired template. The method displays the cost reduction plan corresponding to the desired template, based on the values for the parameters of the desired template received from the user, for checking by the user.

FIELD OF THE INVENTION

The present invention relates generally to purchasing parts fromsuppliers, and more particularly to reducing the costs of purchasingsuch parts from such suppliers.

BACKGROUND OF THE INVENTION

Within corporations and other entities that manufacture equipment, alarge number of parts usually have to be purchased in order tomanufacture the items that the corporations sell. These parts aretypically purchased from suppliers. To obtain the most profit,corporations are always looking to reduce the costs of the parts thatthey purchase from suppliers.

Usually, corporations have purchasing departments staffed by buyers. Thejob of the buyers is to request multiple part suppliers to providequotes for cost estimates for parts, and then to select which suppliershould be used to provide a given part. It is sometimes not as easy asselecting the supplier providing the lowest quoted price for a part tosupply that part. Rather, other factors have to be examined, such as thesupplier's reliability, the quality of previously provided parts by thatsupplier, and so on.

Experienced buyers that have relationships with a number of suppliersand that know the corporation's parts procurement history have thushistorically been instrumental in reducing purchasing costs for partsfrom suppliers. However, it is more desirable to have purchasing costreduction planning not depend on the personal ability or experience of agiven buyer. For this and other reasons, there is a need for the presentinvention.

SUMMARY OF THE INVENTION

The present invention relates to purchasing cost reduction planning andchecking. A method for such purchasing cost reduction planning andchecking, according to one embodiment of the invention, includesreceiving from a user one or more part characteristics and one or moresupplier characteristics. The method determines one or more templatesbased on the part characteristics and the supplier characteristicsreceived. Each template corresponds to a cost reduction plan. Inresponse to the user selecting a desired template, the method receivesfrom the user values for one or more parameters of the desired template.The method displays the cost reduction plan corresponding to the desiredtemplate, based on the values for the parameters of the desired templatereceived from the user, for checking by the user.

A system of an embodiment of the invention includes at least a databaseof templates and a graphical user interface. Each template correspondsto one or more unique pairs of part characteristics and suppliercharacteristics. Each template includes one or more parameters for whichvalues are to be received, and logic to generate a cost reduction planassociated with the template based on the values for the parameters ofthe template. The graphical user interface is that by which to receivefrom a user the following.

First, the selection of one or more specified part characteristics andone or more specified supplier characteristics is received from theuser. Second, the selection of a desired template from one or moretemplates matching each of one or more unique pairs of the specifiedpart characteristics and the specified supplier characteristics isreceived from the user. Third, the values for the parameters of thedesired template are received from the user. The graphical userinterface then displays the cost reduction plan associated with thedesired template, as generated by the logic of the desired templatebased on the values for the parameters received from the user.

An article of manufacture of an embodiment of the invention includes atangible computer-readable medium and means in the medium. The tangiblecomputer-readable medium may be a recordable data storage medium, oranother type of tangible computer-readable medium. The means is forreceiving the following from the user.

First, the means receives selection of one or more specified partcharacteristics and one or more specified supplier characteristics.Second, the means receives selection of a desired template from one ormore templates matching each of one or more unique pairs of thespecified part characteristics and the specified suppliercharacteristics. Third, the means receives values for one or moreparameters of the desired template by which the desired templategenerates a corresponding cost reduction plan. The means is further fordisplaying the cost reduction plan corresponding to the desiredtemplate, as generated by the desired template based on the values forthe parameters received from the user.

Embodiments of the invention provide for advantages over the prior art.Unlike the prior art, an effective cost reduction plan does not requirethat the buyer in question have to be experienced, nor does it depend onthe personal ability of the buyer. Rather, the knowledge and experienceof an effective buyer is essentially encapsulated within the logic of atemplate. Therefore, even an inexperienced buyer without personalknowledge of the corporation's parts and suppliers can generate aneffective cost reduction plan.

Still other advantages, aspects, and embodiments of the invention willbecome apparent by reading the detailed description that follows, and byreferring to the accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

The drawings referenced herein form a part of the specification.Features shown in the drawing are meant as illustrative of only someembodiments of the invention, and not of all embodiments of theinvention, unless otherwise explicitly indicated, and implications tothe contrary are otherwise not to be made.

FIG. 1 is a flowchart of a method for purchasing cost reduction planningand checking, according to an embodiment of the invention.

FIGS. 2A, 2B, 2C, and 2D, are diagrams depicting representative andexemplary graphical user interfaces (GUI's) by which some of the partsof the method of FIG. 1 can be performed, according to an embodiment ofthe invention.

FIG. 3 is a diagram of a representative system, according to anembodiment of the invention.

DETAILED DESCRIPTION OF THE DRAWINGS

In the following detailed description of exemplary embodiments of theinvention, reference is made to the accompanying drawings that form apart hereof, and in which is shown by way of illustration specificexemplary embodiments in which the invention may be practiced. Theseembodiments are described in sufficient detail to enable those skilledin the art to practice the invention. Other embodiments may be utilized,and logical, mechanical, and other changes may be made without departingfrom the spirit or scope of the present invention. The followingdetailed description is, therefore, not to be taken in a limiting sense,and the scope of the present invention is defined only by the appendedclaims.

FIG. 1 shows a method 100 for purchasing cost reduction planning andchecking, according to an embodiment of the invention. The method 100may be implemented as one or more computer programs. Input may bereceived from a user and output may be displayed to a user via agraphical user interface.

The method 100 may first authenticate the user (102). For instance, auser may enter his or her user name and an associated password. The username and the password may be verified against a database of previouslyentered user names and passwords to ensure that the user has authorityto perform the method 100.

Next, the method 100 receives from the user one or more partcharacteristics and one or more supplier characteristics (104). The partcharacteristics are characteristics of the part in relation to which themethod 100 is being performed. The part may be a part that the employerof the user needs in order to manufacture a given item. The partcharacteristics are thus the desired or specified part characteristicsof this part. The supplier characteristics are characteristics ofsuppliers of this part. These are thus the desired or specified suppliercharacteristics of such suppliers of this part.

In one embodiment, the part characteristics are selected as one or moreof the following. First, it is specified whether a part is multipurpose.A multipurpose part may be, for instance, one that is not particular tothe item that the user's employer is manufacturing, but which can beused for many purposes. Common electrical components, such as resistorsand capacitors, may be considered multipurpose parts. Second, it isspecified whether a part is custom. A custom part may be one that ismanufactured by a supplier solely for the user's employer in order tomanufacture a given item, and is not one that is used to make otheritems. A small sticker indicating the model name of a given item, forinstance, may be such a custom part.

Third, it is specified whether the part has a high risk of restrictedsupply. For instance, at various times, certain memory components, suchas flash memory devices, may have very high demand throughout theindustry, and thus have a high risk that their supply may be restrictedon the open market. Fourth, it is specified whether the part has a highunit price. For instance, computer processors are commonly veryexpensive.

Fifth, it is specified whether the part requires advancedspecifications. For instance, critical components may require asignificant number of specifications, and thus cannot be manufactured byjust any supplier. Sixth, it is specified whether the part has manycomponents. For instance, a given part may have a large number ofsub-parts or components, and may be more susceptible to pricefluctuations. It is noted that some of the part characteristics may begrouped together into sub-groups, such that only one part characteristicfrom a given sub-group may be selected.

In one embodiment, the supplier characteristics are selected as one ormore of the following. First, it is specified whether there are manysuppliers for a part. Second, it is specified whether there are not manysuppliers for a part. Third, it is specified whether there is only onesupplier for a part. These three supplier characteristics may be groupedtogether into a sub-group, such that just one of these suppliercharacteristics may be selected. That is, a user can specify that thereare many suppliers for a part, that there are not many suppliers, orthat there is only one such supplier. The user cannot specify two ormore of these supplier characteristics, because they are mutuallyexclusive.

Fourth, it is specified whether a percentage that all the parts producedby a given supplier will be purchased is high. For instance, a custompart may mean that the user's employer will purchase all or nearly allof the instances of this part made by a supplier. By comparison, amultipurpose, generic part may mean that the user's employer will notpurchase all or nearly all of the instances of this part made by asupplier. Fifth, it is specified whether the supplier has a high degreeof prior cooperation. For instance, the user may wish to use a supplierthat his or her employer has previously worked with, and previouslyworked with well.

Sixth, it is specified whether the supplier has strong elementaltechnology and product development capability. The user may wish to usesuch a supplier. For example, for custom integrated circuits, it may bedesired to use a supplier that has a strong background in thistechnology, as may be evidenced by the number of engineers that thesupplier has on staff. Similarly, it may be desired to use a supplierthat has product development capability. Such a supplier may be able todevelop a part based on the specifications for the part provided by theuser's employer, instead of being only able to manufacture the partwhere the complete plans are provided by the user's employer.

FIG. 2A shows a graphical user interface (GUI) 200 by which a user isable to provide the part characteristics and the suppliercharacteristics to the method 100 of FIG. 1 in part 104, according to anembodiment of the invention. The top half of the GUI 200 allows a userto select part characteristics, whereas the bottom half of the GUI 200allows a user to select supplier characteristics.

Characteristics that are mutually exclusive of one another areselectable by the user via circular radio buttons. For instance, whethera part is multipurpose and whether a part is custom are two partcharacteristics that are mutually exclusive of one another. Therefore,if a user selects the former, the latter is automatically deselected,and vice-versa. Likewise, whether there is a high risk of restrictedsupplies for a part and whether there is a low risk of restrictedsupplies for a part are two part characteristics that are mutuallyexclusive of one another. If a user selects the former, the latter isautomatically deselected, and vice-versa.

By comparison, characteristics that are not mutually exclusive of oneanother are selected by the user via rectangular checkboxes. Forexample, whether the buying share from a supplier for a given part ishigh, whether there has been a high degree of cooperation with asupplier, and whether the supplier has strong elemental technology andproduct development capability are three supplier characteristics thatare not dependent on one another. A user can select any combination ofthese three supplier characteristics, for instance.

Referring back to FIG. 1, the method 100 then determines one or moretemplates, based on the part characteristics and the suppliercharacteristics received from the user (106). A template in oneembodiment is particular to one or more unique pairs of partcharacteristics and supplier characteristics. That is, for a unique pairincluding a part characteristic and a supplier characteristic, there areone or more templates. A template corresponds to a cost reduction plan.

More specifically, a template includes a number of parameters for whichvalues are to be received from the user, and that are associated in someway with the part characteristics and the supplier characters of theunique pairs to which the template corresponds. The template alsoincludes logic to generate its corresponding cost reduction plan, basedon the parameter values received from the user. Thus, a template can beconsidered as a general cost reduction plan, which becomes specific to aparticular scenario based on the parameter values entered by the user.

Templates can be generated in any of a number of different ways, as canbe appreciated by those of ordinary skill within the art. In oneembodiment, for instance, expert buyers may be interviewed, and theirknowledge and experience encapsulated within a number of templates. Thatis, by using conventional or other techniques, the knowledge andexperience of expert buyers may be transformed methodically intotemplates. The manner by which templates can be generated, however, isbeyond the scope of the present patent application, though those ofordinary skill within the art can understand how to generate suchtemplates.

For X part characteristics and Y supplier characteristics, there are Xtimes Y unique part characteristic-supplier characteristic pairs. Eachof these unique pairs is associated with a number of templates. However,a given template can be associated with more than one unique partcharacteristic-supplier characteristic pair.

In one embodiment, the templates based on the part characteristics andthe supplier characteristics received from the user are determined inpart 106 of the method 100 by performing parts 108 and 110. First, foreach unique part characteristic-supplier characteristic pair of the partcharacteristics and the supplier characteristics received from the user,one or more templates that correspond to this unique pair are retrievedfrom a previously established database (108). The result of performingpart 108 is a list of a number of templates. Thereafter, the templatesthat are used are assembled as all the unique templates retrieved fromthe database (110).

For example, consider the situation where there is one partcharacteristic X1 and two supplier characteristics Y1 and Y2. As such,there are two unique part characteristic-supplier characteristic pairs:X1 and Y1, and X1 and Y2. In part 108, templates T1, T2, and T3 may beretrieved from the database as corresponding to the unique pair X1-Y1,and templates T2, T3, and T4 may be retrieved from the database ascorresponding to the unique pair X1-Y2. Therefore a total of sixtemplates are retrieved in part 108, but two templates, T2 and T3, areassociated with each pair, such that there are only a total of fourunique templates. These four unique templates, T1, T2, T3, and T4, arethose that are assembled in part 110 as the templates determined in part106 of the method 100.

Upon the templates being determined, the user is enabled to select adesired template (112). For instance, FIG. 2B shows a GUI 210 by which auser is able to select a desired template in part 112 of the method 100of FIG. 1, according to an embodiment of the invention. Four differentand unique templates have been determined based on the partcharacteristics and the supplier characteristics received from the user,and are displayed to the user within the GUI 210. The user then simplyselects the template button next to the desired template.

Referring back to FIG. 1, the method 100 then receives from the uservalues for the parameters of the desired template selected by the user(114). As has been described, each template has one or more parameters.The values for the parameters transform the template from being ageneral description of a cost reduction plan, to a particulardescription of the cost reduction plan pertaining to the particularsituation of the user.

FIG. 2C shows a GUI 220 by which a user enters values for the parametersof the desired template selected in part 114 of the method 100 of FIG.1, according to an embodiment of the invention. The template selected isparticularly “cost reduction negotiation using information on marketprices.” The parameters that the user has to enter values for include atarget part, both its general (or major) category and its specific (orminor) category, pricing type, current buying price advantage over themarket price as a percentage, and a searching period. The GUI 220enables the user to enter values for all these parameters.

Referring back to FIG. 1, the method 100 displays the cost reductionplan costing to the desired template selected based on the values forthe parameters of the template as received from the user (116), forchecking (i.e., review or analysis) by the user. For instance, the logicof the desired template generates this cost reduction plan based on theparameter values entered by the user. The user thus is able to generateand analyze a cost reduction plan, even if he or she is not anexperienced buyer, due to the intelligence built into the templates.

FIG. 2D shows a GUI 230 by which the cost reduction plan may bedisplayed to the user in part 116 of the method 100 of FIG. 1, accordingto an embodiment of the invention. For the particular template “costreduction negotiation using information on market prices,” there are twoaspects of the plan displayed. The top half of the GUI 230 shows a graphdepicting, for instance, the difference between the actual purchaseprice and the market price during a given period of time. The bottomhalf of the GUI 230 shows a table that automatically calculates thetarget purchase price by adding the advantage ratio of the contractprice to the forecast by the market price information that may becontained within the template itself.

Referring back to FIG. 1, the method 100 finally allows or enables theuser to save the cost reduction plan corresponding to the desiredtemplate based on the parameter values received from the user (118). Assuch, the user can save the plan, and revisit the plan at a later timeor date. The method 100 thus provides a framework by which eveninexperienced users are able to generate cost reduction plans fromdesired part and supplier characteristics. This is achieved by havingtemplates, associated with part characteristic-supplier characteristicpairs, which correspond to cost reduction plans and contain the logicnecessary to generate the plans based on input parameter values. Theuser only has to know which supplier and part characteristics aredesired, and then only has to select a desired cost reduction plan andenter parameter values for that plan in order to generate the plan forreview, analysis, and other checking.

FIG. 3 shows a rudimentary system 300, according to an embodiment of theinvention. The system 300 is depicted in FIG. 3 as including a templatedatabase 302 and a graphical user interface (GUI) 304. As can beappreciated by those of ordinary skill within the art, the system 300will typically include other components, in addition to those depictedin FIG. 3, such as processors, memory, and so on.

The template database 302 stores a number of templates, as have beendescribed. Each template corresponds to one or more unique partcharacteristic-supplier characteristic pairs. Each template includes anumber of parameters, and logic for generating a cost reduction planbased on values for the parameters, as has been described.

The GUI 304 can encompass in one embodiment the various GUI's that havebeen described in relation to FIGS. 2A-2D. Thus, the GUI 304 is that bywhich to receive from a user the selection of one or more partcharacteristics 306 and one or more supplier characteristics 308. Basedon the part characteristics 306 and the supplier characteristics 308selected, the GUI 304 displays one or more of the templates within thedatabase 302 that match unique pairs of the characteristics 306 and 308.The GUI 304 then enables a user to select a desired template from thesetemplates, and is that by which a user enters parameter values 310 forthe parameters of the desired template selected. Thereafter, the GUI 304displays the cost reduction plan associated with the desired template asgenerated by the logic of the template based on the parameter valuesentered by the user.

It is noted that, although specific embodiments have been illustratedand described herein, it will be appreciated by those of ordinary skillin the art that any arrangement calculated to achieve the same purposemay be substituted for the specific embodiments shown. This applicationis thus intended to cover any adaptations or variations of embodimentsof the present invention. Therefore, it is manifestly intended that thisinvention be limited only by the claims and equivalents thereof.

1. A method for purchasing cost reduction planning and checkingcomprising: receiving from a user one or more part characteristics andone or more supplier characteristics; determining one or more templatesbased on the part characteristics and the supplier characteristics, eachtemplate corresponding to a cost reduction plan; and, in response to theuser selecting a desired template, receiving from the user values forone or more parameters of the desired template; displaying the costreduction plan corresponding to the desired template based on the valuesfor the parameters of the desired template received from the user, forchecking by the user.
 2. The method of claim 1, wherein each templatecomprises: the parameters for which the values are to be received fromthe user and associated with one or more of the part characteristics andone or more of the supplier characteristics; and, logic to generate thecost reduction plan to which the template corresponds based on thevalues for the parameters of the template.
 3. The method of claim 2,wherein displaying the cost reduction plan corresponding to the desiredtemplate based on the values for the parameters of the desired templatereceived from the user comprises the logic generating the cost reductionplan based on the values for the parameters of the template receivedfrom the user.
 4. The method of claim 1, wherein determining thetemplates based on the part characteristics and the suppliercharacteristics comprises: for each of one or more unique pairs of oneof the part characteristics and one of the supplier characteristics,retrieving from a database of templates one or more templatescorresponding to the unique pair; and, assembling the templates as allunique templates retrieved from the database.
 5. The method of claim 4,wherein one or more of the templates within the database are associatedwith a plurality of unique pairs of part characteristics and suppliercharacteristics.
 6. The method of claim 1, wherein at least one of thepart characteristics are each selected from a group of potential partcharacteristics, the group of potential part characteristics dividedinto a plurality of sub-groups, the user able to select at most onepotential part characteristic from each sub-group.
 7. The method ofclaim 1, wherein the part characteristics are each selected from a groupof potential part characteristics essentially consisting of: whether apart is multipurpose; whether the part is custom; whether the part has ahigh risk of restricted supply; whether the part has a low risk ofrestricted supply; whether the part has a high unit price; whether thepart requires advanced specifications; and, whether the part has manycomponents.
 8. The method of claim 1, wherein at least one of thesupplier characteristics are each selected from a group of suppliercharacteristics, the group of potential part characteristics dividedinto a plurality of sub-groups, the user able to select at most onepotential part characteristic from each sub-group.
 9. The method ofclaim 1, wherein the supplier characteristics are each selected from agroup of potential supplier characteristics essentially consisting of:whether there are many suppliers for a part; whether there are not manysuppliers for the part; whether there is only one supplier for a part;whether a percentage of all parts produced by a supplier will bepurchased is high; whether the supplier has a high degree of priorcooperation; and, whether the supplier has strong elemental technologyand product development capability.
 10. The method of claim 1, whereinthe part characteristics, the supplier characteristics, and the valuesfor the parameters of the desired template are received from the userthrough a graphical user interface (GUI).
 11. The method of claim 1,further comprising: authenticating the user prior to receiving the partcharacteristics and the supplier characteristics from the user; and,enabling the user to save the cost reduction plan corresponding to thedesired template based on the values for the parameters of the desiredtemplate received from the user.
 12. A system comprising: a database oftemplates, each template corresponding to one or more unique pairs ofpart characteristics and supplier characteristics comprising: one ormore parameters for which values are to be received; and, logic togenerate a cost reduction plan associated with the template based on thevalues for the parameters of the template; and, a graphical userinterface by which to receive from a user: selection of one or morespecified part characteristics and one or more specified suppliercharacteristics, selection of a desired template from one or moretemplates matching each of one or more unique pairs of the specifiedpart characteristics and the specified supplier characteristics, and thevalues for the parameters of the desired template, wherein the graphicaluser interface is further to display the cost reduction plan associatedwith the desired template as generated by the logic of the desiredtemplate based on the values for the parameters received from the user.13. The system of claim 12, wherein at least one of the specified partcharacteristics are each selected from a group of potential partcharacteristics, the group of potential part characteristics dividedinto a plurality of sub-groups, the user able to select at most onepotential part characteristic from each sub-group.
 14. The system ofclaim 12, wherein the specified part characteristics are each selectedfrom a group of potential part characteristics essentially consistingof: whether a part is multipurpose; whether the part is custom; whetherthe part has a high risk of restricted supply; whether the part has alow risk of restricted supply; whether the part has a high unit price;whether the part requires advanced specifications; and, whether the parthas many components.
 15. The system of claim 12, wherein at least one ofthe specified supplier characteristics are each selected from a group ofsupplier characteristics, the group of potential part characteristicsdivided into a plurality of sub-groups, the user able to select at mostone potential part characteristic from each sub-group.
 16. The system ofclaim 12, wherein the specified supplier characteristics are eachselected from a group of potential supplier characteristics essentiallyconsisting of: whether there are many suppliers for a part; whetherthere are not many suppliers for the part; whether there is only onesupplier for a part; whether a percentage of all parts produced by asupplier will be purchased is high; whether the supplier has a highdegree of prior cooperation; and, whether the supplier has strongelemental technology and product development capability.
 17. The systemof claim 12, wherein the graphical user interface is further to:authenticate the user prior to receiving the specified partcharacteristics and the specified supplier characteristics from theuser; and, enable the user to save the cost reduction plan associatedwith the desired template based on the values for the parameters of thedesired template received from the user.
 18. An article of manufacturecomprising: a tangible computer-readable medium; and, means in themedium for receiving from a user: selection of one or more specifiedpart characteristics and one or more specified supplier characteristics,selection of a desired template from one or more templates matching eachof one or more unique pairs of the specified part characteristics andthe specified supplier characteristics, and values for one or moreparameters of the desired template by which the desired templategenerates a corresponding cost reduction plan; and, displaying the costreduction plan corresponding to the desired template as generated by thedesired template based on the values for the parameters received fromthe user.
 19. The article of manufacture of claim 18, wherein thespecified part characteristics are each selected from a group ofpotential part characteristics essentially consisting of: whether a partis multipurpose; whether the part is custom; whether the part has a highrisk of restricted supply; whether the part has a low risk of restrictedsupply; whether the part has a high unit price; whether the partrequires advanced specifications; and, whether the part has manycomponents.
 20. The article of manufacture of claim 18, wherein thespecified supplier characteristics are each selected from a group ofpotential supplier characteristics essentially consisting of: whetherthere are many suppliers for a part; whether there are not manysuppliers for the part; whether there is only one supplier for a part;whether a percentage of all parts produced by a supplier will bepurchased is high; whether the supplier has a high degree of priorcooperation; and, whether the supplier has strong elemental technologyand product development capability.